A lot has been brewing for the pig farmers in Germany: slumped prices, collapsed markets and now also a weak demand for sausages and steaks for the grill.
The farms are in an “acute emergency”, said Federal Agriculture Minister Julia Klöckner (CDU) in Bonn after a video conference with representatives of animal owners, processors and retailers. Around 260,000 tons of pork are in stock. In addition to corona financial aid and other relief for the farmers, special campaigns in supermarkets are also coming into focus in order to boost sales – but this is not supposed to start the next price war.
Sales promotion offensive
It was the wish of those involved that there should be a sales promotion offensive, said Klöckner after the deliberations. However, care should be taken to ensure that the prices do not “go down so much that you cannot get out of them psychologically”. It’s about appreciation for food. Rather, the origin should be emphasized – that is, born, fattened, slaughtered, processed and marketed in Germany. In fact, extremely cheap offers for meat have come under heavy criticism, especially since investments in the conversion of stalls for more animal welfare are at stake.
Before the discussion, the farmers’ association demanded that retailers, processors and bulk consumers should agree on pork marketing with such a Germany label. The food trade signaled after the meeting that they were open to “temporary sales promotion measures for pork” in the supermarkets, as an association spokesman said. The discounter Aldi announced that it would be offering “additional promotional items” at low prices over the next few weeks in order to contribute to relaxation. But that could only be a short-term support.
Price in the basement
Fluctuations in the markets and in prices are not unusual for the still 22,000 pig farms. Such a ruinous development over such a long time has rarely happened, the farmers’ association said in mid-August. The price had just slipped to 1.30 euros per kilogram of pork. Several negative effects are now intensifying. The Corona crisis is further depressing sales at events and in the catering trade, as Klöckner explained. This year’s barbecue season was relatively weak due to the often rainy weather. In addition, there would be additional costs for feed in view of the weak prospects for the grain harvest in 2021.
African swine fever, which appeared around a year ago in Brandenburg and Saxony, also has lasting consequences. As a result, exports to important sales markets in Asia collapsed – for pork from all over Germany. It was possible to agree with some states that the import ban only applies to meat from the affected German regions. Negotiations by the federal government with the former major buyer China are difficult.
45 percent is exported
Even before the industry discussion, the trade made it clear that there are limits to the supermarkets’ involvement – not just because of the prohibition of price fixing. In the case of pork, the world market dominates the price setting – and local retailers cannot compensate for such effects. In addition, a large proportion of 45 percent of pork is exported, said the association.
The working group for rural agriculture criticized that the crisis was also the result of a wrong focus on export markets. “The motto was always more and more intense.” It is necessary to tackle a conversion of animal husbandry to more animal welfare in a timely manner. There is a lot of political support for this, but concrete steps can only be taken after the federal election. The environmental organization Greenpeace demanded: “The number of animals must go down.” Only in this way could supply and demand be brought back into balance and prices stabilized. However, a long-term perspective is crucial.
Longer corona aid
In order to provide acute support for pig farmers, the application deadline for corona bridging aid is to be extended to the end of December, as Klöckner said. In addition, she asked the EU Commission to examine relief, for example in the case of subsidies. Farmers could also turn to the tax authorities when it comes to tax deferrals, said Lower Saxony’s Agriculture Minister Barbara Otte-Kinast (CDU), who, like North Rhine-Westphalia’s head of department Ursula Heinen-Esser (CDU), took part in the conversation. Around 60 percent of German pigs are kept in both federal states.
The three ministers emphasized the responsibility of everyone in the chain from the barn to the shops to find common solutions. Therefore, as with milk, there should be an industry strategy for pigs with all parties involved, said Klöckner.